In this week’s top stories, Meta’s post-earnings rally helped the Nasdaq index to rebound in early trading on Thursday. Meanwhile, BlackRock and Invesco launched two ETFs, hedge funds saw seven-year high inflows in Q1, JinkoSolar had a major breakthrough in solar cells and analysts see MercadoLibre exceeding earnings expectations.
Meta pulls Nasdaq futures up
The Facebook parent company’s shares rose 19% in premarket trading on Thursday after it announced that it had exceeded user growth in Q1. Bloomberg estimates that this jump accounted for one-third of the gains seen in Nasdaq futures — Meta has a 3% weighting in the Nasdaq 100 — yesterday. S&P futures, meanwhile, where Meta has a 1.1% weighting in the S&P 500 index, rose 1.5%.
Since Russia’s invasion of Ukraine began on 24 February, fintech funds have fared far worse than the market with the ARK Fintech Innovation ETF falling 21% compared to the S&P 500’s 2.8% drop in the same period. With strong long-term investment cases, digital payment stocks PayPal, Block and SoFi could present a buying opportunity at discounted prices.
Investors hit up hedge funds
In the first three months of the year, hedge funds saw the highest inflows since Q2 2015 at $19.8bn. It’s a sign that investors are trying to protect themselves amid the volatility bubbling up in the markets due to rising inflation, interest rates and geopolitical tensions. While the S&P 500 lost 5% of its value in the first quarter — its worst performance since the pandemic hit — hedge fund managers gained 0.3% on average, according to data firm HFR.
Stocks such as ChargePoint, Pod Point and Enphase Energy have been dragged down so far in 2022. Despite growing calls for a worldwide transition to clean energy, investor confidence has been hit by recession fears and interest rate hikes. However, looking at the long-term picture, these stocks have ample room to grow, with many analysts holding a positive outlook for the year ahead.
Funds in focus
This week, BlackRock launched an ETF fund focusing on the blockchain called the iShares Blockchain and Tech ETF [IBLC], two weeks after Fidelity’s Crypto Industry and Digital Payments ETF [FDIG] debut. Fidelity also has a Metaverse ETF [FMET] as hedge funds look to capitalise on emerging trends. Meanwhile, Invesco unveiled an ETF covering metals required for electric vehicles and the broader energy transition called the Electric Vehicle Metals Commodity Strategy No K-1 ETF [EVMT].
JinkoSolar shares shot up 12% on Wednesday after it announced a major breakthrough in the development of its solar cells. It was confirmed that the 182mm N-type monocrystalline silicon solar cell that Chinese company has been developing has a world-record breaking maximum solar conversion efficiency of 25.7%. This means it can convert more solar energy into usable electricity than any other device.
MercadoLibre up ahead of earnings
The Argentinian ecommerce firm, seen as a key rival to Amazon in the region is tipped to deliver good news when earnings come out on 4 May, with Morgan Stanley saying earnings expectations are currently too low. The most lucrative part of MercadoLibre’s business is its payments app MercadoPago, which saw a total of $77bn payments made through it last year, up 55% on 2020.
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